Lasry on the Risks of Keeping Money in Smaller Banks

The video discusses financial strategies, focusing on whether to move money from smaller banks to larger ones like JPMorgan or Bank of America due to systemic risk concerns. It highlights the importance of trust and confidence in banking systems, especially for businesses with large deposits. The discussion also covers the potential instability of regional banks if the Federal Reserve does not provide guarantees, leading to deposit flights. The video concludes with predictions on deposit trends and the necessity of Fed intervention to stabilize the banking system.

What is one reason the speaker suggests moving money from smaller banks to larger ones?

• Smaller banks are more innovative.

• Larger banks are less likely to be affected by systemic risk.

• Smaller banks have better customer service.

• Larger banks offer higher interest rates.

According to the speaker, what might happen if the Federal Reserve does not provide guarantees?

• Smaller banks will merge with larger banks.

• Interest rates will increase.

• The regional banking system will become more stable.

• There will be a flight of deposits from smaller banks.

What is the main concern for businesses with large deposits in smaller banks?

• The risk of losing their capital.

• The lack of online banking options.

• The difficulty in obtaining loans.

• The potential for higher fees.

What does the speaker suggest will happen if deposits continue to move out of smaller banks?

• Larger banks will start losing deposits.

• Smaller banks will increase their interest rates.

• The Federal Reserve will lower interest rates.

• The Federal Reserve will need to intervene.

What is the speaker's prediction about the actions of businesses in response to a 1% risk probability?

• Businesses will seek government bailouts.

• Businesses will diversify their investments.

• Businesses will invest more in smaller banks.

• Businesses will move their capital out of smaller banks.